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New Las Vegas Homes

The best investment - A real estate investment

As a fairly general rule, homes appreciate about four or five percent a year. Some years will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region.

Five percent may not seem like that much at first. Stocks (at times) appreciate much more, and you could easily earn over the same return with a very safe investment in treasury bills or bonds.

Taking a second look at your real estate investments

Presumably, if you bought a $200,000 house, you did not pay cash for the new Las Vegas home. You got a mortgage, too. Suppose you put as much as twenty percent down - that would be an investment of $40,000.

At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $40,000. Your annual "return on investment" would be a whopping twenty-five percent.

Of course, you are making Las Vegas mortgage payments and paying Las Vegas property taxes, along with a couple of other costs. However, since the interest on your Las Vegas mortgage and your Las Vegas property taxes are both tax deductible, the government is essentially subsidizing your new Las Vegas home purchase.

Your rate of return when buying a home is higher than most any other investment you could make.

There are times when the economy is brisk and everyone feels confident about his or her prospects for the future. As a result, they spend money. People eat out more, buy new cars, and….…They buy houses.Then, for one reason or another, the economy slows down. Companies lay off employees and consumers are more careful about where they spend money, perhaps saving more than usual. As a result, the economy decelerates even further. If it slows enough, we have a recession.

During such a time, fewer people are buying new Las Vegas homes. Even so, some homeowners find themselves in a situation where they must sell. Families grow beyond the capacity of the Las Vegas home, employees get relocated, and some may even find themselves unable to make their Las Vegas mortgage payment - perhaps because of a layoff in the family.

Supply and demand for Las Vegas real estate

When the supply of available Las Vegas houses is greater than the supply of real estate buyers, appreciation may slow and prices may even fall, as happened in the early eighties and the early to mid-nineties.

If you are lucky enough to purchase a Las Vegas home during a slow period, you can be reasonably certain the economy will begin to show strength again. At times, Las Vegas real estate values may even surge drastically. In many regions of the country, this is precisely what occurred in the late eighties and nineties.

Las Vegas real estate market timing is difficult

One problem with attempting to time your purchase to the business cycle is that no one can accurately predict the future. Another challenge is that mortgage interest rates are generally higher during a depressed market and income may not be keeping up because less overtime is available and bonuses or commissions are down. With higher interest rates and lower earnings, fewer people can qualify for a new Las Vegas home purchase than in more prosperous times.

Why you should not wait to make your Las Vegas real estate Investment

Plus, "timing the market" generally works best for first-time buyers. People who already have a home usually need to sell it in order to buy their next one. If a "move-up" buyer wants to buy a home during a depressed real estate market, that means they usually have to sell one during the slow market, too. If a seller wants to sell his home to take advantage of a "hot" market when prices are fairly high, they generally have to buy their next home during that same hot market.It tends to equal out.Finally, the business cycle can change over time. Since 1983, we have had two fairly long expansions with only a slight recession in between each. You would not want to wait nine years to buy a home, would you? You could miss out on a substantial amount of appreciation by waiting, and end up paying much higher prices.As you read and study about buying Las Vegas real estate, you will often find the words "house" and "home" used interchangeably. There is a huge difference between a Las Vegas house and a Las Vegas home. A Las Vegas house can be a place to eat, sleep, park your car, and put all your "stuff" (including other family members). It is a material possession and an investment. A Las Vegas home is where you feel comfortable, warm, safe, and protected. A Las Vegas home is where you live.

A house is something you buy logically. A home is an emotional purchase. When buying Las Vegas real estate you have to balance your emotional wants and your logical needs because there will almost certainly be a time when the two conflict.

Example of a Las Vegas real investment strategy

For example, you may want a house with a view, but the payment is higher than you feel comfortable with on a thirty-year fixed rate mortgage.What do you do? Purchase the house anyway and budget more carefully for the next few years? Buy the same house without the view and get it cheaper? Make a larger down payment by borrowing from your 401K or family members, so you get a lower payment? Get an adjustable rate mortgage with a smaller payment instead of a fixed rate loan? Or buy a smaller Las Vegas house and still get the view?

When viewing the Las Vegas house, most people look at it emotionally and envision it as a safe, happy, comfortable home. Later, when making the offer or filling out a Las Vegas mortgage application, your logic may begin to kick in, instead.

Balancing your decisions to purchase Las Vegas real estate

The trick in buying Las Vegas real estate is to view all decisions with both a logical perspective and an emotional perspective. If a situation presents itself that requires a trade-off, decide on whether there is a huge conflict or a small one. Logic should win the big conflicts, but emotion should always be a factor, even winning the small ones.

You will find yourself owning a warm, happy, safe home - and an investment for the future at a price you are willing to pay.

Las Vegas High Rise Condos & Lofts

Las Vegas Home Builders

Copyright by Joseph Y Lee Professional Corporation

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